Sunday, July 1, 2012

Leviev wins legal round in diamond row with Gaydamak

Gaydamak, described by the judge as a 'volatile
and impulsive character' who was 'distinctly prone to exaggeration,'
became involved in Angolan business and politics in the 1990s.

A court battle between two Israeli multimillionaires who fell
out after making a fortune from Angolan diamonds ended on Friday when
Arcadi Gaydamak lost his bid to reclaim hundreds of millions of dollars
he said he was owed by diamond mogul Lev Leviev. Gaydamak said he would
appeal the decision.
The two are among a handful of buccaneering businessmen who have made
fortunes in countries like Angola, Congo and Guinea, securing positions
of influence that have helped their companies profit hugely from the
continent's rich natural resources.
The case, brought by the Russian-Israeli Gaydamak over disputed unpaid
commissions and dividends against Uzbekistan-born Leviev, also involved
testimony on the roles of a Russian rabbi and an Angolan general - and
was heard in London.
It was the latest of a rash of cases brought by billionaires from
Russia and the former Soviet republics to the courtrooms of the British
capital, revealing at times a clash of cultures - and some less than
complimentary comments.
Gaydamak, described by the judge as a "volatile and impulsive
character" who was "distinctly prone to exaggeration," became involved
in Angolan business and politics in the 1990s. He claimed to have
suggested to the Angolan government that it obtain control of the
country's diamond industry at the height of the civil war so as to cut
off the rebels' flow of cash from so-called "blood diamonds." Angola is
one of the world's most significant diamond producers and has long been
attractive to traders and buyers. Gaydamak also said he was instrumental
in setting up the Angolan Diamond Selling Corporation, which had sole
buying rights to Angolan diamonds.
He said he had tried to make Leviev a front man for his activities
because of a French inquiry into illegal arms supplies. Gaydamak was
later cleared of involvement in such supplies. Speaking by video link
from Israel because of an outstanding French tax charge, Gaydamak told
the High Court on the first day of the trial that he believed he was
entitled to about half of Leviev's diamond assets in Angola. His
argument rested on his claim that there was a written agreement between
them dated December 2001.
Leviev, who has a home in London and who made his name challenging
diamond giant De Beers' monopoly on the sale of rough diamonds, denied
signing the agreement. Gaydamak argued that Leviev agreed to hold their
joint assets, in particular their share in Ascorp and any income from
those assets, on trust in equal shares. Leviev's lawyers argued that
those claims were settled through a 2011 agreement between the two in
which Gaydamak signed away his rights to the assets. Gaydamak said he
was induced to sign it.
High Court judge Geoffrey Vos said in his judgment on Friday: "I find
that the 2001 agreement was indeed signed by Mr. Gaydamak and Mr.
Leviev, and was a valid and enforceable agreement," but he added that
the parties had indeed also entered into a valid and binding settlement
that took effect in August of last year. He therefore dismissed
Gaydamak's claim. Gaydamak later issued a statement in which he said he
would apply for permission to appeal.
Leviev did not escape criticism from the judge, who spoke of his
arrogance and his "rewriting the history" by leaving some crucial
characters out of the story. Vos said he was conscious that he had "not
accepted either side's evidence in its entirety."